It’s one of the great ironies of thenew Internet economy: As the value of digital content on the Internet
falls toward zero because of its ubiquity, the value of real-time
physical products increases. While this is promising news for musicians
and writers, it’s no panacea for those filmmakers now desperately
searching to discover a new business model to revitalize their old
industry.

In the music industry, as sales of recorded music continue to fall
dramatically, the live music economy is actually doing quite well. In
the old mass-media analog economy, musical artists played concerts to
sell recordings; in the digital economy, artists like Radiohead, Trent
Reznor of Nine Inch Nails, and Prince give away their recordings on the
Web in order to sell concert tickets.

The same is true of writers. As Chris Anderson argues so convincingly in his new book, Free,
writers are better off giving their work away for free on the Web (as he does with Free) and then earning substantial fees through live lectures and talks. Indeed, Anderson confesses in Free that this is the very business model that might enable him to put his myriad children through college.

But this new model isn’t reassuring for the professional filmmaker,
whose core skill lies in the creation of high-quality video content. So
the motion picture industry, which began at the start of the 20th
century as the “people’s art,” is now vulnerable to being destroyed by
the new people’s art: free online video.....